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  • NIBSS Instant Payment crosses N10tr mark, says CBN

    NIBSS Instant Payment crosses N10tr mark, says CBN

    The Central Bank of Nigeria (CBN) has said online transfers via the Nigeria Interbank Settlement System (NIBSS) Instant Payments have reached an all-time record of N10.85 trillion.

    CBN Director, Banking and Payment Systems, ‘Dipo Fatokun, who gave the figure  at a conference organised by the Finance Correspondents Association of Nigeria in Lagos at the weekend, said the expansion of the electronic payments channels enabled NIBSS to achieve the feat.

    He said the figure, which was for 2013,  was enhanced by transfers through online web payments, electronic funds transfer, various forms of cards, Point of Sale (POS) terminals and Automated Teller Machines (ATMs) non-cash transactions.

    “As an instance, the NIBSS Instant Payments used for online transfers has grown at an annual growth rate of 199 per cent and 190 per cent in volume and value respectively with total transfers on the platform grossing N10.85 trillion,” he said.

    Fatokun who spoke on the theme: “E-Payment: Past, Present and Future” said that the operations of local and international “electronic payments companies have had positive impact on investment and employment climate of the country.

    He highlighted the extensive role of payments system which include effective monetary policy, stable and sound financial system as well as economic growth and development.

    The CBN director said that sustainable economic growth requires a well-functioning, efficient and reliable clearing and payments system which would enhance local and international business transactions by providing liquidity in the financial system.

    He said that Nigerian payment system has been significantly transformed in recent years. “As you may recall, time was in this country when up-country cheques, by this I mean cheque presented for clearing in a different state from where the issuing account is domiciled, took 21 working days to clear. Today, cheques clear nationwide, next day and soon to become same day. You may bear witness with me that approaching the millennium, we were counting the total number of ATMs in the country in tens, today they are in their thousands. Just three years ago, we barely have 5,000 active POS but today, there are over 100,000 installed in various merchants across Nigeria. The last decade indeed has been revolutionary for the national payments system,” he said.

    He noted that since the establishment of the NIBSS in 1994, cheque clearing cycle has improved, adding that the CBN issued the first guidelines on electronic banking in 2003 which covers a whole spectrum of electronic payments.

    “Following the realisation by the Central Bank of  Nigeria that the payments system, especially through the settlement process usually indicates the initial distress signals among banks and the potential impact on the bank’s role as lender of last resort  and by extension monetary policy implementation, deliberate attention were given to the need to effectively manage payments system risks,” he said.

    He said the apex bank introduced the settlement framework for cheque clearing in 2004 and implemented the Real Time Gross Settlement (RTGS) system which went into operation in 2006.

    The RTGS is a critical infrastructure which largely addressed credit and settlement risk in the payments system. Large value payments were therefore transited from the cheque clearing system into the RTGS which settles the transactions on gross basis instantaneously. This eliminated substantial risk from the payments system and maximum transaction limit of N10 million was imposed on cheque transactions along with the Cheque Standard of 2006.

    He acknowledged the challenges. “We are not unmindful of the challenges on our path to strengthening the electronic payments system culture. The infrastructural issues remain daunting, fraud is unfortunately booming globally and Nigeria is having her fair share especially in the area of electronic banking. Consumer protection is also a key challenge for us especially with the low level of sophistry of our, people on financial services” but he assured that bank is effectively responding to these challenges.

    “In addition to ensuring that we deploy appropriate technology such as the chip+PIN for card transactions, we are mandating all banks to comply with requirements for highly secured online payments platform by implementing cutting edge electronic banking security solutions including but not limited to the implementation of hardware tokens, behavioural monitoring, SMS/Email transaction alert, and anti-phishing solutions.

    Furthermore, the bank in collaboration with the Bankers Committee is implementing an industry-wide anti-fraud system to manage risks, minimize fraud and respond promptly and adequately to emerging fraud trends. The Nigeria Electronic Fraud Forum continues to explore options at improving strategies for tackling fraud in the Nigerian payments landscape” he assured.

     

  • CBN refunds N17b ‘fraudulently’ charged by banks to customers

    CBN refunds N17b ‘fraudulently’ charged by banks to customers

    The Central Bank of Nigeria (CBN) has refunded over N17 billion to customers in fraudulent charges by banks as at last month.

    Its Head of Consumer Protection Department, Hajia Khadijah Kassim, told reporters in Calabar, the Cross River State capital, yesterday, that the refund followed about 5,500 complaints  against the banks by customers.

    Responding to a question on bank fraud at a press briefing to mark the commencement of the Financial Literacy and Consumer Awareness Campaign, she said as soon as the bank receives any complaint of fraud, it immediately swings into action by investigating it.

    She also said as part of the consumer protection duties of the apex bank, it ensures that customers get fair deal from their banks.

    “We ensure that banks treat their customers fairly,” she said.

    Accordingt to her,  customers have a right to complain. She urged the customers to regularly pay attention to their bank statements, insisting that customers must question any debit to their account they do not understand and report to their various banks.

    She said the banks have a period of 30 days to resolve the issues else they are escalated to the CBN, where they ensure the issues are resolved fairly to the customer.

    Kassim who represented the Director of the department,  Mr U.A. Dutse, said the CBN is putting structures in place to ensure that consumers get maximum benefits from the provision of financial services to enable them take charge of their financial well-being and enhance economic development.

    She said the purpose of the week-long sensitisation programme is to interact and with and sensitise Cross Riverians on financial literacy and consumer protection issues.

  • Workers urge CBN to sanction banks over ‘fraud’

    Workers urge CBN to sanction banks over ‘fraud’

    The Senior Staff Association of Electricity and Allied Companies (SSAEAC) has urged the Central Bank of Nigeria(CBN) to probe the activities of  four banks (nams withheld) for allegedly mismanaging its accounts.

    Its President- General, Bede Opara, said two of the banks are first generation banks, while the other two are second generation.

    Opara said the development became necessary, following fraudulent transactions discovered in the accounts of the union.

    He said some senior officials of the association, had in 2003 opened account in their names in one of the banks, instead of the union’s name to warehouse the two per cent deduction from the severance package of the workers of the defunct Power Holding Company of Nigeria (PHCN).

    He said the development made the union to suspend the affected workers, adding that the association was later informed of the incident through a letter from the bank.

    He said: ‘’Immediately we received the letter, the secretary-general of the union and I went to the bank to open another account to negate the one opened by the suspended worker.

    The National Executive Council (NEC) at its meeting on February 21, this year constituted an Ad-Hoc Disciplinary Committee to probe allegation of financial misconducts of the workers. But before the committee could take off, the workers have gone to court to stop the investigation and further prevent the banks from cancelling the transaction.”

    He said the National Industrial Court sitting in Lagos had on July 9, this year dismissed the suit filed by the aggrieved members.

    Opara said the banks, in spite of the ruling, have neither effected changes on the accounts or honour transactions made by the association.

    According to him, the development informed the union’s decision to call on CBN to investigate the banks and sanction those that are culpable of the offence.

  • CBN plans 10-year bailout facility for GENCOs, DISCOs

    CBN plans 10-year bailout facility for GENCOs, DISCOs

    The Central Bank of Nigeria (CBN) has planned a 10-year bailout facility for the electricity distribution and generation companies otherwise known as GENCOs and DISCOs.

    According to the Chairman, Nigeria Electricity Regulatory Commission (NERC), Dr. Sam Amadi, who broke this news to energy correspondents in a capacity building workshop at Abuja yesterday, the commission was to work out the amount of the facility later yesterday.

    He explained that the essence of the plan is to create a fund in place of the present revenue shortfall in the companies’ operations without inconveniences for the consumers.

    The chairman stressed that “the CBN fund gives an opportunity for the Discos and Gencos to have this money on time right now and then for it to be repaid over 10 years. They are giving us 10 years instead of five, which reduces the amount that the consumers will pay. They have given us a 10 -year facility, so to say.”

    Amadi also said that NERC will use the fund to benchmark the DISCOs revenue neutrality for them to ensure that they meet their commitments to consumers.

    Following the provision of the fund, the chairman said that “we will say we have reset their investment and monitor them.”

    His words: “But the key issue is the revenue shortfall in the market.

    “We are arranging with the Central Bank of Nigeria to create a fund to cover the shortfalls without necessarily inconveniencing the consumers.

    “It will be spread over 10 years. It gives the operators the opportunity to make quick investments and quick returns in terms of services.”

  • CBN to move against banks holding large excess reserves of N300bn

    CBN to move against banks holding large excess reserves of N300bn

    The Central Bank of Nigeria (CBN) is set to move  against banks holding large excess reserves of over N330 billion in their vaults.

    Addressing journalists at the end of the Monetary Policy Committee (MPC) meeting in Abuja yesterday, the CBN governor, Mr. Godwin Emefiele stated that the apex bank was concerned “that banks were holding large excess reserves averaging over N300 billion even when there were ample opportunities for productive and profitable lending to the real sector of the economy.”

    This concern he said was “further strengthened by the reality of injecting an additional N866 billion into the system through the redemption of maturing AMCON bonds in October.”

    To check this ugly development, the MPC, Emefiele said has directed the CBN “to explore ways of encouraging banks to lend such excess reserves to the real sector” because “given the apathy to lending, banks may be inclined more to placing these new funds in the Standing Deposit Facility (SDF) or use it to increase pressure on the exchange rate.”

    The Committee also expressed concern about high banking system liquidity and its potential effects on inflation and the exchange rate. According to Emefiele, “the policy challenges would include sustaining the stability of the naira exchange rate, managing the vulnerability to capital flow reversal, building fiscal buffers to ensure against global shocks, managing inflation and exchange rate expectations and safeguarding the financial system stability, as well as a buildup in election related spending.”

    The MPC noted that the restrictive stance of monetary policy, has provided important defenses against “structural liquidity in the banking system and also reaffirmed the willingness to play a key role in managing expectations around exchange rate and inflation vulnerabilities.”

    As a result of all these concerns, Emefiele disclosed that “adequate consideration would need to be accorded the goal of reining-in banking system liquidity to safeguard the objective of price stability.”

    Consequently, the MPC decided by a majority vote to: retain the Monetary Policy Rate (MPR) or interest rate at 12 per cent with a corridor of +/- 200 basis points around the midpoint; retain the public sector Cash Reserve Requirement (CRR) at 75.0 per cent; and retain the private sector Cash Reserve Requirement (CRR) at 15.0 per cent.

    The decision to retain the rate figures or bring down interest rate as desired, Emefiele said “depends on the size of liquidity and all economic parameters in the Nigerian economy, particularly as we move towards election. The MPC thinks that although the natural direction is to tighten, we still felt that if we cannot reduce interest rates we should just leave it alone rather than taking it up.”

    This he said is “primarily because we think that increasing interest rate will hurt our people, it will lead to some of the companies complaining that the high interest rate will hurt their business and for that reason,  we decided to leave interest rate stable.”

    “Ordinarily because of the size of liquidity that we see in the system today, what we should have done actually is to tighten further. But we will continue to monitor the liquidity system and I can assure you that what we have in our agenda that says that interest rates will gradually come down, is an objective that we will eventually pursue. But we’ll continue to monitor what is happening in the Nigerian economy and all the parameters to be able to determine whether or not we have attained the righ time to move in that direction” he stated.

  • CBN plans 10-year bailout for GENCOs, DISCOs

    CBN plans 10-year bailout for GENCOs, DISCOs

    The Central Bank of Nigeria is planning a 10-year bailout for the electricity distribution and generation companies otherwise known as GENCOs and DISCOs.

    The Chairman of the Nigeria Electricity Regulatory Commission (NERC), Dr. Sam Amadi, told Energy correspondents at a capacity building workshop in Abuja, Friday, that the commission will work out the amount of the facility later on Friday.

    He explained that the idea is to create a fund in place of the present revenue shortfall in the companies’ operations without inconveniencing the consumers.

    The NERC chairman said, “The CBN fund gives opportunity for DISCOs and GENCOs to have this money on time right now and then repay it over 10 years. They are giving us 10 years instead of five which reduces the amount that the consumers will pay. They have given us a 10 -year facility so to say.”

    His words: “But the key issue is the revenue shortfall in the market. We are arranging with the Central Bank of Nigeria to create a fund to cover the shortfalls without necessarily inconveniencing the consumers. It will be spread over 10 years. It gives the operators the opportunity to make quick investments and quick returns in terms of services.”

     

  • NAFDAC prepares staff for retirement

    NAFDAC prepares staff for retirement

    MOVED by the plight some workers face after retirement, the National Agency for Foods, Drugs and Administration Control (NAFDAC) has sponsored a three-day training for its staff in Lagos.

    The programme, which ends today, is being facilitated by Project Fix Nigeria Consulting, and attended by  Commandant, Nigeria Armed Forces Resettlement  Centre (NAFRC)Air Vice Marshall John Morgan, representatives of the Central Bank of Nigeria (CBN), banks and Trade Union Congress (TUC).

    NAFDAC’s Director-General, Dr. Paul Orhii, said the training was imperative because workers do not prepare for retirement. He cited some foreign countries where workers plan for retirement from the first day of their employment. As a result, they look forward to enjoying a happy post-working life, he said.

    He said the training was part of the agency’s welfare package for its workers, saying it is the first among the Ministries, Departments and Agencies (MDAs) to kick off the programme. “I think it is a very good programme. I encourage you to take it serious and think seriously about your future,” he said.

    Justifying the inclusion of workers who are not yet ready for retirement in the programme, Orhii explained that while it would help them to prepare for retirement, it would also enable them to go into farming, an area the constitution allows public servants to go into.

    AVM Morgan said the training was good in that agro based schemes could excite members of the Armed Forces. He said he was touched  each time pensioners were called for payment, they come out enmasse, suggesting all might not be well with some of them. He said NAFRC was embracing the training because its objectives were in tandem with those of the centre.

    President, Project Fix Nigeria Consulting, Olusegun Okowontan, said the training was novel in the country because it emphasises team work. He said the workers would be trained on how they could tap into the advantage of their numbers, pool their resources together and build a mega firm from it. He listed areas they could look into as agro allied.

    He said: “All over the world, what drives the economy are the people. So, people make the economy work. It works with numbers of people. The more the people contribute, the more the money that would be available for development.

    He said the role of his firm, beside the training, is to mobilise people for growth and provide leadership for the project, adding: “We deal with institutions, not individuals. Our target is the family.”

    He listed the benefits of the programme as enjoyment of reduced interest rates, revision of rural-urban migration and getting some resources that would have been difficult for individuals to get on their own.

  • NDIC advises stakeholders on mobile money

    NDIC advises stakeholders on mobile money

    The Nigeria Deposit Insurance Corporation (NDIC) has urged stakeholders in the mobile money business to seek ways of extending the service to a larger percentage of the population.

    NDIC’s chief Umaru Ibrahim, who said this during a roundtable discussion on mobile money services in Lagos, noted that there are over 100 million mobile phone lines in the country.

    He said: “According to Enhancing Financial Innovation and Access (EFiNA) survey, the rural population is 71 per cent, while 76.2 per cent of the population remains unbanked. Mobile phone ownership is 55.6 per cent in the rural areas.”

    He said effective rendering of mobile banking financial services could be a key mechanism in achieving the objective of National Financial Inclusion Strategy (NFIS) based on the huge success recorded by Kenya, Uganda and South Africa in enhancing financial inclusion through mobile financial services.

    Ibrahim said mobile banking subscribers would soon get deposit insurance coverage, with each subscriber guaranteed up to N200,000, or N500,000 as applicable to Microfinance Banks/Primary Mortgage Banks and Deposit Money Banks(DMBs), in the event of bank failure.

    He explained that if a bank fails, the insured mobile account can be transferred to another sound bank, to further engender public confidence in the system and promote financial stability.

    According to him, the framework for extending deposit insurance to individual customers of mobile payment services is being finalised.

    He explained that mobile payment is operated under financial regulation and performed from, or through a mobile device.

    “It is a convenient, secure and affordable way to send money to friends and family, using mobile phones and/or other electronic devices like internet facilities,” he disclosed.

    Ibrahim stressed that with mobile money; all economic agents can transfer funds to any recipient in the country and outside the country, as well as pay for their goods and services, using their mobile phones and other electronic devices.

    “Mobile phones, in particular, are an attractive way to promote financial inclusion given their extensive use by the population and global reach. Mobile phones can serve as a virtual bank card, point of sale terminal (PoS), Automated Teller Machine (ATMs) or internet banking terminal. The confluence of banking technologies with mobile telephony leads to wider penetration and holds new promise of financial inclusion for the minority of the unbanked,” he emphasised.

    He said the Central Bank of Nigeria (CBN) issued a regulatory framework for the operation of mobile payments services in Nigeria in 2009, adding that the apex bank has also granted licences to 21 mobile money operators.

  • CBN urges MDAs to deploy e-channels in remittances

    THE Central Bank of Nigeria (CBN) has asked Ministries, Departments and Agencies (MDAs) to adopt e-payment channels for their transactions.

    Salaries, pensions and supplies and taxes are to be paid through the electronic channels. The policy applies to organisations with over 50 employees.

    In a circular, the apex bank said the process would reduce time and transaction costs, minimise leakages in government revenue receipts, provide reliable audit systems, and make it comply with global payment standards. The policy is also expected to ensure confidentiality of transactions.

    CBN said, henceforth, payment instructions and associated schedules are no longer to be transmitted to banks by organisations in the public and private sectors through unsecured channels, such as paper-based mandates, flash drives, compact discs and email attachments.

    The transactions, the financial services regulator said, must be routed through bank-approved electronic platforms, which transmits the instruction to debit a payer’s account and credit that of a beneficiary, mobile account, electronic wallet or other electronic channels.

    It will include the ability of a payer to monitor and obtain electronic feedback on the status of any payment, without depending on any third party, manual or semi-manual means.

    Draft guidelines that will ratify the policy have been sent to commercial banks and payment service providers. The exercise is in line with the CBN Act, 2007, Section 47, Sub Section 2(2d).

    It said the policy aligns with the National Payment Systems Vision 2020 (NPSV) aimed at ensuring the availability of safe and effective mechanisms for making and receiving various payments from any location and at any time.

    The CBN said all public and private sector organisations, which relates with employees, pensioners, suppliers, taxpayers and others, are considered as stakeholders required working for the success of the policy.